The following trial balance was extracted from the nominal ledger of Ariel plc on 31 March...

  

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The following trial balance was extracted from the nominal ledger of Ariel plc on 31 March 20X2. £'000 Equity share capital (£1 per share) Trade payables Buildings - cost/value Plant and machinery - cost/value Buildings - accumulated depreciation Plant and machinery - accumulated depreciation Trade receivables Accruals at 31 March 20X2 6% bank loan repayable in 15 years Cash at bank Retained earnings Interest paid Revenue Purchases Distribution costs Administrative expenses Inventories as at 1 April 20X1 Dividends paid 17,630 14,000 2,133 2,887 411 27,481 1,857 2,235 3,790 920 73,344 £'000 5,000 1,347 16,276 3,600 129 6,850 4,595 35,547 73,344 Further information: (1) The inventories at the close of business on 31 March 20X2 were valued at £4,067,000. (2) Depreciation has already been provided on property, plant and equipment for the year ended 31 March 20X2. (3) On 31 March 20X2 items of plant with a cost of £12,750,000 and accumulated depreciation of £3,100,000 were assessed to have a value of £8,500,000 in an impairment review. Any adjustment should be included in cost of sales. (4) The company rented some office photocopiers for the period 1 March to 30 June 20X2. The contract price for the four months was £164,000 and this was paid in full on 3 March and is charged to administrative expenses. (5) The company sourced extra warehousing space, for the storage of goods prior to their sale, for a period of three months from 1 February to 30 April 20X2. The invoice for the full three months of £114,000 was paid on 16 April. No entry has been made in the accounts for this transaction, which should be charged to distribution costs. (6) The income tax charge for the year has been calculated as £874,000. (7) On 15 April 20X2 one of the company's customers went into liquidation. Trade receivables at 31 March 20X2 include a balance of £95,000 owed by this customer. The directors have been advised that they are unlikely to receive any of this amount and wish to write the debt off as irrecoverable. Irrecoverable debts are written off to administrative expenses. (8) Ariel plc provides a warranty for certain lines of product. It is estimated that 1% of these warranties will be invoked at a cost of £25,000. Requirement Prepare the statement of profit or loss for Ariel for the year ended 31 March 20X2 and the statement of financial position at that date. The following trial balance was extracted from the nominal ledger of Ariel plc on 31 March 20X2. £'000 Equity share capital (£1 per share) Trade payables Buildings - cost/value Plant and machinery - cost/value Buildings - accumulated depreciation Plant and machinery - accumulated depreciation Trade receivables Accruals at 31 March 20X2 6% bank loan repayable in 15 years Cash at bank Retained earnings Interest paid Revenue Purchases Distribution costs Administrative expenses Inventories as at 1 April 20X1 Dividends paid 17,630 14,000 2,133 2,887 411 27,481 1,857 2,235 3,790 920 73,344 £'000 5,000 1,347 16,276 3,600 129 6,850 4,595 35,547 73,344 Further information: (1) The inventories at the close of business on 31 March 20X2 were valued at £4,067,000. (2) Depreciation has already been provided on property, plant and equipment for the year ended 31 March 20X2. (3) On 31 March 20X2 items of plant with a cost of £12,750,000 and accumulated depreciation of £3,100,000 were assessed to have a value of £8,500,000 in an impairment review. Any adjustment should be included in cost of sales. (4) The company rented some office photocopiers for the period 1 March to 30 June 20X2. The contract price for the four months was £164,000 and this was paid in full on 3 March and is charged to administrative expenses. (5) The company sourced extra warehousing space, for the storage of goods prior to their sale, for a period of three months from 1 February to 30 April 20X2. The invoice for the full three months of £114,000 was paid on 16 April. No entry has been made in the accounts for this transaction, which should be charged to distribution costs. (6) The income tax charge for the year has been calculated as £874,000. (7) On 15 April 20X2 one of the company's customers went into liquidation. Trade receivables at 31 March 20X2 include a balance of £95,000 owed by this customer. The directors have been advised that they are unlikely to receive any of this amount and wish to write the debt off as irrecoverable. Irrecoverable debts are written off to administrative expenses. (8) Ariel plc provides a warranty for certain lines of product. It is estimated that 1% of these warranties will be invoked at a cost of £25,000. Requirement Prepare the statement of profit or loss for Ariel for the year ended 31 March 20X2 and the statement of financial position at that date.

Answer rating: 100% (QA)

Both statements with notes are given below Statement of Profit or Loss of Ariel PLC on 31 march 20x2 ... View the full answer